Experience Matters

Went with my family to the California Railroad Museum in Sacramento a few weekends ago. If you haven’t gone, it is worth the trip. It’s an incredible collection with a knowledgeable and passionate staff, and a large toy train area for younger children.

Exploring the history and evolution of the railroad in California had several pertinent lessons on innovation. For instance, I learned a civil engineer, Theodore Judah, had the vision and audacity to suggest a transcontinental railroad.

Judah had the sense of mind to gather around him several wealthy financiers to help bring his dream to birth. Leland Stanford was one backer of Judah’s crazy dream. Though Judah died before the railroads met on 10 May 1869, his vision drove huge changes in the economic, social, and technical landscape of America.

“Gee John, that’s an interesting bit of trivia. But, what does this have to do with endurance? Come on, Judah died of yellow fever…”

In the early days of the railroad every local community and railroad company set their own standards of operation, including the track gauge cars rode on. This was incredibly important to the market and supply chain.

Typically cars from one gauge could not run on another gauge of track. [Gauge is the distance between the railroad track rails] This meant that as railroads expanded and eventually met other railroads, there was a good chance their gauge was incompatible. This required laborers to shift cargo from the cars on one railroad to another. It inserted delays in shipping, increased threat of theft and breakage, and required most rail transit to act like the first dot matrix printers – returning to the start before shipping something out.

Eventually, the cost of maintaining separate rail ecosystems exceeded the benefit. As a result there was tremendous consolidation in standards. A few standards emerged, but there were many losers. This resulted in huge losses by railroad builders but led to a tremendous growth in innovation resulting in a standardized, stable rail platform. We still use that platform today to ship most freight in the United States.

Winning the standardization race is a long term strategy for companies training for the innovation marathon. Firms that treat this as a sprint will not reach the finish line. The question to ask yourself is: based on your offering and the target market, what kind of race are you running, and are you training to win or just to finish.